White collar crime hit by massive shake-up

THE fallout from the banking inquiry including an expected glut of executives and banks facing criminal charges is set to see all white collar criminal cases moved from state courtrooms to the Federal Court.

In one of the biggest shake-ups to the corporate criminal justice system in two decades, state supreme, district and County Courts are to be stripped of responsibility to prosecute corporate criminals who will now front the Federal Court.

Such a jurisdictional move has been considered for years, if for nothing else for consistency in penalties across Australia for such crimes, but the fallout from the sensational banking inquiry will now see that happen.

The banking inquiry has led to a huge shake-up of the corporate criminal justice system. Picture: John Feder

Indeed decade-old renovations to Federal Courts in Sydney, Melbourne and Brisbane made provision with the erection of jury boxes, yet to be used, in anticipation it one day could be referred criminal cases beyond their corporate "cartels" price fixing prosecution remit.

A report on the banking royal commission by its chief Kenneth Hayne is due to be handed to the Governor-General in the next two weeks and is not only expected to recommend harsher penalties for rogue bankers in the financial services industry but also more resources for the Federal Court to deal with the cases.

Kenneth Hayne is due to hand his report to the Governor-General in the next fortnight. Picture: David Geraghty

Attorney-General Christian Porter's office has confirmed it had already asked the Attorney-General's Department, in consultation with the Federal Court, to review the court's expansion to criminal jurisdiction and responsibilities.

Judicial sources said yesterday that review had now been completed and confirmed it saw it as a natural fit given State courts were under-resourced and backlogged to deal with the complex cases which under a federal jurisdiction could be given priority prosecutions and harsher penalties.

More judges and resources have been recommended.

The move will prove popular with the public after stunning evidence of misbehaving bank executives in what the commission - through 68 days of public hearings, 134 witnesses and more than 6500 tendered evidence exhibits - heard involved a financial industry culture of greed, that "ignored basic standards of honesty" in pursuit of profit, including insurance companies like AMP, major banks notably CBA, ANZ and Westpac routinely breaching lending laws approving loans and credit cards and charging fees to thousands of people who were already dead. The independence of the mortgage broker industry has also come into question with evidence of backhanders from banks to sell products.

Already 42 criminal briefs have been or are in the process of being referred to the Commonwealth Director of Public Prosecutions with a further 15 expected next year on top of at least 40 civil penalty proceedings. The DPP late last year received $41.6 million of new money to handle cases referred by the Australian Securities and Investments Commission in the wake of the commission hearings.